One of the most anticipated deals in the property sector was finally sealed yesterday after
Westfield Group
and AMP Capital unveiled a $1.7 billion asset swap involving some of the country’s biggest shopping centres.

The move ends a long-running stalemate between the two heavyweights over the development and management of the 10 malls within the $9.3 billion partnership but the transaction stops short of a complete divorce, as many in the market had predicted.

Under the massive carve-up, the joint venture will shrink to just four jointly owned properties worth $4 billion.

Westfield will no longer hold a stake in any assets managed by AMP Capital, resolving a glaring aberration in the listed developer’s global empire.

AFR
AFR

Andrew Parsons of Resolution Capital welcomed the overhaul and said the only surprise in the protracted saga is the length of time it had taken to iron out differences.

Westfield has emerged as a net seller in the transaction, offloading its stakes in Macquarie Centre in Sydney, Pacific Fair on the Gold Coast and Garden City Booragoon in Perth for $1.1 billion.

In exchange, AMP Capital has sold its stakes in four centres, hopping out entirely from Mount Gravatt in Brisbane and the Knox and Casey centres in Melbourne.

It has also shed a part-interest in vast Warringah Mall in Sydney, widely regarded as one of the partnership’s best-performing properties.

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Macquarie’s Paul Checchin said in a note that Westfield and its satellite, passive investment trust Westfield Retail Trust had netted $204 million and $180 million in cash respectively through the sell-down.

He also pointed out the assets were exchanged at an average 2.4 per cent discount to Westfield’s last disclosed book values.

Yet, as
Andrew Bird
of AMP Capital emphasised in a media conference call yesterday, the transaction would not have been possible without the support of two offshore institutional investors.

Canada’s Pension Plan Investment Board and the Abu Dhabi Investment Authority have tipped in $872 million for two separate stakes in sprawling Macquarie Centre in Sydney as well as Pacific Fair on the Gold Coast.

Both those assets are perceived as having suffered most acutely from the clash between Westfield and AMP Capital.

But Mr Bird brushed aside allegations of disharmony yesterday, characterising the relationship as “very successful" and pointed out “that from time to time both parties will take different views on how to develop assets and what assets are a priority."

Sources emphasised the properties were divided up in the simplest fashion possible, with each investor selling down their minority stake.

The one exception is Warringah Mall, where AMP Capital had the majority holding.

A person familiar with the discussions claimed Westfield was also driven by concerns about the Australian Competition and Consumer Commission, which cast a jaded eye over the original takeover of the AMP vehicle a decade ago. AMP Capital was advised by Macquarie Capital.